Cabot Prime Week Ending October 16, 2020
Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any changes to our recommendations over the previous week. We include this table at the bottom of the Weekly Summary, and provide a link here at the top to the Stock Recommendations Tracker.
Cabot Weekly Review (Video)
In this week’s stock market video, Mike Cintolo discusses the market’s ups and downs this week, which haven’t changed his overall optimism—he’s not flooring the accelerator, but has continued to put some money to work as opportunities arise. Indeed, the current pullback could offer up a lot of setups if it continues, though Mike’s half-expecting some shenanigans given earnings season and the election approaching.
UPCOMING CABOT EVENTS:
Cabot Prime Member Call – October 2020
FREE WEBINAR FOR PRIME MEMBERS ONLY: Wednesday, October 21 Sign up now.
Turnaround Investing with Bruce Kaser
FREE WEBINAR: Thursday, October 22 Sign up now.
Cabot Retirement Club Member Call - October 2020
FREE WEBINAR FOR PRIME MEMBERS ONLY: October 29, 2020 Sign up now.
Advisory Services
Cabot Growth Investor
Bi-weekly Update October 15: The market took a hit today, which wasn’t totally unexpected; overall, the damage was contained, with the Cabot Tides remaining positive and most growth stocks still in good shape. Mike is still leaning bullish, but he’s also taking things on a stock-by-stock basis. In the Model Portfolio, he’s adding a half-sized position (5% of the portfolio) in Penn National Gaming (PENN), which will leave us with around 18% in cash.
Bi-weekly Issue October 8: It’s not a blastoff-type of environment, but the evidence has steadily improved during the past three weeks, first due to the action of leading growth stocks, and now, our Cabot Tides have returned to bullish territory. Thus, we continue to follow the evidence, slowly putting money to work and rotating into stronger situations. Last week, we averaged up in two of our recent buys, and tonight, Mike is adding a full position in Datadog (DDOG), a fresh leader. Elsewhere in tonight’s issue, we write about the ups and downs of recent IPOs, as well as one sector that is beginning to reemerge and has many stocks that fit our stock picking criteria. There are two portfolio changes today: Twilio (TWLO) and ProShares S&P 500 (SSO) both move from Hold to Buy.
Other Stocks of Interest October 8: Follow ups to stocks featured June 4, 2020 (issue 1447) to October 8, 2020 (issue 1456). Since many of the stocks written about in Other Stocks of Interest don’t make their way into the Model Portfolio, you won’t see them followed on a regular basis in the issues. However, we are monitoring these stocks, and this listing gives you a quick view of our latest thoughts.
Cabot Top Ten Trader
Movers & Shakers October 16: All in all, our stance hasn’t changed: We’re growing more bullish given the improving evidence from the indexes and leading stocks; our Market Monitor will likely stay at a level 7 given what we see. That said, we’re content to extend our line gradually while picking our spots and stocks carefully, rather than plunging into a bunch of names right ahead of earnings. Mike’s buy ideas today are: Anaplan (PLAN), Meritage (MTH) and Plug Power (PLUG). His sells are: NovoCure (NVCR), Guardant Health (GH) and Whirlpool (WHR) after its recent run.
Weekly Issue October 12: Three weeks ago, the major indexes were on their knees and very few stocks were in good shape. But there’s been a steady improvement in the overall evidence since then, and while it’s not 1999 out there, the picture looks pretty good—the intermediate-term trend has returned to the bullish side of the fence, while many individual stocks (growth and otherwise) show constructive action. We’ve even seen a big pickup in the number of names hitting new highs (multi-month high in NYSE new highs on Friday)! Short-term, the steady up-move in the market and many stocks could easily bring a pullback or some hesitation, but there’s no question the rubber-meets-the-road evidence has improved greatly, which is what counts most to us. We’re nudging our Market Monitor up to a level 7 in today’s issue. This week’s list has a bunch of good-looking charts from a variety of sectors. Mike’s Top Pick is Marvell Technology (MRVL), which is helping to lead the recent charge in chip stocks.
Cabot Undervalued Stocks Advisor
Special Bulletin October 15: Chart Industries’ (GTLS) shares surged 11% yesterday to 83.67, about 6% above our 79 price target. While we appreciate the company’s strengths in the cryogenic equipment industry, and recognize that the shares could continue to surge on enthusiasm about Chart’s incremental emphasis on hydrogen technologies, we are staying with our price target. With the stock now above that target, we are moving the shares to Sell.
Weekly Update October 14: Several of our recommended stocks had awful chart patterns in recent weeks. It’s easy to get either scared out or worn out of these types of positions. TAP touched lows not seen since the 2009 financial crisis, while EQH fell sharply in early September. However, TAP has rebounded to just below our “cost” and EQH has essentially fully recovered its losses. The valuation and price target discipline helped give us the conviction to sit tight or even add to our positions. Some of our recommended stocks have continued to weaken and we are watching, as noted, their valuation and fundamentals closely to weigh whether they are worth keeping. Bruce has two changes to the portfolio today: Bristol-Myers Squibb (BMY) moves from Hold to Buy and Terminix (TMX) is a new Buy.
Monthly Issue October 7: In a directionless market, with many potentially strong catalysts but one that is pricing in a strong earnings recovery that may not happen, what can an investor do? We usually focus on a few steps. First, we keep our overall market exposure within comfortable levels – not too aggressive or too light. We want to have some cash reserves to dampen any downturn and possibly deploy at bargain prices, yet work to avoid being too conservative as the market may resume its upward march. We want to make sure we know what we own and why we own it. If the market gets sporty, we want the conviction to stay the course. And, be on the lookout for new ideas. Investors can get complacent, meaning that some opportunities are bound to emerge. We anticipate finding some appealing bargains in the coming weeks. Bruce has one portfolio change today: Bristol-Myers Squibb (BMY) – Moves from Strong Buy to Hold.
Cabot Stock of the Week
Weekly Issue October 12: The overall investing environment continues to improve, with our intermediate-term trend-following indicator now back in positive mode and growth stocks in particular seeing strong buying. Risk-tolerant investors can now invest aggressively again (in last week’s PINS recommendation, for example), while more risk-averse investors can commit to stocks like this week’s recommendation, Quanta Services (PWR), which was recently recommended by Bruce Kaser in Cabot Undervalued Stocks Advisor. Tim has two portfolio changes today: Both Azek (AZEK) and Trulieve (TCNNF) move from Hold to Buy.
Cabot Global Stocks Explorer
Bi-weekly Issue October 15: Markets hit pause this week as third-quarter earnings begin rolling in, doubt reigns over chance of another stimulus bill, and uncertainty over the outcome of the presidential election just three weeks out is palpable. Overseas, the Stoxx Europe 600 fell 2.2% as local governments and local authorities hurried to impose lockdown restrictions to halt the spread of Covid-19 cases. This week’s new recommendation, LogIQ (LGIQ), is a fintech stock offering an intriguing mix of Southeast Asian, American and European growth. There are no portfolio changes today.
Bi-weekly Update October 8: The Explorer portfolio had another positive week, as the market is hostage to enacting another politically difficult stimulus package. Count Carl as skeptical. Stay-at-home stocks are leading the market while economic-recovery stocks struggle. Most overseas markets rose yesterday but Hong Kong’s Hang Seng Index was the one exception. That followed reports that the Trump administration is discussing potential curbs to digital payment platforms developed by Chinese tech companies Tencent Holdings and Ant Group on the grounds of national security. There are no portfolio changes today.
Cabot Dividend Investor
Monthly Issue October 14: Certain portfolio positions are breaking out and we’ll let them ride. Most notably, IIPR and QCOM have soared to brand new all-time highs over the past three weeks and could continue to run higher for a while. Additionally, CCI and ARE, as well as DLR, have all started to move higher after a long sideways period. They might continue to move in the near term. While several positions are perking up, there’s a couple that haven’t been working and still aren’t working, namely EPD and VLO. The choppy market hated these stocks just as much as the good market, and there are no signs of life. However, both companies will report third-quarter earnings in the weeks ahead, and Tom is hoping the reports will act as a catalyst for improved performance in the months ahead. Today’s featured stocks are: AbbVie Inc. (ABBV) and Eli Lilly and Company (LLY).
Weekly Update October 7: It’s hard to see how the market makes a significant move higher as the uncertainty of the election comes ever closer. Plus, the pandemic is still with us and the end is still not in sight. But there is good news as well. Third-quarter GDP is expected to be phenomenal, with forecasted growth of 30%, reflecting a resilient economy that is rapidly recovering. In short, it looks like there will be a tug-o’-war with good news and bad news at least up until the election. Tom expects the market will continue to bounce around in that time frame. However, there could be great things for the market beyond the election and the pandemic. The forecast is choppiness now, and a bull run later. Meanwhile, several portfolio positions are moving higher. Tom has no rating changes today.
Cabot Marijuana Investor
Update October 14: Tim’s bias is to trust the voice of the charts, knowing that they reflect the consensus opinion about all those factors—and thus he’s now going to buy a little more. Specifically, the portfolio will double its investment in Canopy Growth (CGC). Then we’ll increase our position in Innovative Industrial Properties (IIPR) by 50%. Lastly, we’ll take a new position in up-and-coming multistate operator Jushi Holdings (JUSHF).
Monthly Issue September 30: Over the past seven weeks, our portfolio has shifted from fully invested to 49% cash—and because of that we’ve lost less than the Marijuana Index; in fact we still have a decent gain YTD. Hopefully, you’ve done similarly. And now we’ll raise just a little more cash by selling our final stake in Aphria (APHA). Other changes: Innovative Industrial Properties (IIPR) is upgraded to Buy, and Turning Point Brands (TPB) is downgraded to Hold.
Special Report: April 29, 2020
U.S. Vertically Integrated Multistate Operators (MSOs)Cabot Early Opportunities
Special Bulletin September 24: With 32 stocks in our portfolio and a market that’s going through all manner of gyrations right now, it’s time to part ways with a few of our underperforming positions. Sell OneWater Marine (ONEW), Liberty Media Formula One (FWONK) and SelectQuote (SLQT), Sell Half Schrodinger (SDGR) and Keep Holding Nikola (NKLA).
Monthly Issue September 16: Tyler’s advice today is to continue to average into the stocks that are most attractive to you and which you think you’ll have the best chance of holding onto through the inevitable corrections. The September selloff may or may not be over. The market is trying to look forward into the first half of 2021 at a time when vaccines could hit the market. There is lot of uncertainty surrounding what could happen, and how evolving business and consumer trends will shift. And that’s going to continue to work through the market in hard-to-predict ways. Our game plan will continue to be to find companies that can excel now, in 2021, and beyond. Since we often don’t know exactly how things will play out it’s important to always average in. Today’s Top Pick is Kinsale Capital (KNSL), the only publicly traded property and casualty (P&C) insurer focused exclusively on the excess and surplus (E&S) lines market in the U.S.
Cabot Profit Booster
October Expiration October 16: Our covered call ideas for the October expiration cycle are on their way to yielding us another solid month of profits ranging from 7.88% to 17.41%. That being said, should the market sell off, HZNP and MOS are within range of not finishing over our strike price today, which is totally fine.
Weekly Issue October 13: The Stock – Marvell Technology (MRVL) - Following the March panic low, MRVL lifted off from a solid base in May and quickly reached a record high by June. A 3-month period of volatility followed which saw shares whip around, with the stock temporarily falling under the 50-day line. But this proved to be a classic “head fake” as MRVL recovered its stride and is once again in liftoff mode. Stop — 38. The Covered Call Trade: Buy Marvell Technology (MRVL) Stock at 43.5, Sell to Open November 44 Strike Calls (exp. 11/20/2020) for $2, or a Net Price of 41.5 or less.
Cabot Income Advisor
Weekly Update October 14: The market realizes that both the election and the pandemic are temporary. It sees a booming economy in the quarters ahead with historic low interest rates and a friendly Fed. Money has no place else to go but stocks to fetch a decent return. As long as investors aren’t frightened, they will continue to put money in the market. The current portfolio has each half telling a different story. Of the six current positions, three of them have pending calls written on them. These stocks including SBUX, BIP and V are all above the targeted strike price. SBUX and BIP calls expire Friday and are likely to be called. V still has a while to go, until November 20th.
Monthly Issue September 23: There has been a lot of activity in the portfolio this past week. Four positions, including AABV, IIPR, QCOM and USB, had covered calls written on them with an options expiration date of last Friday, September 18. Three of those positions exceeded the strike price and were called away (IIPR, QCOM, and USB). There are currently only two positions with outstanding calls. The recent downward-trending market has reduced the level of call premiums and it isn’t an ideal point in time to write more. But things can change quickly. Tom’s featured stock is: Visa (V).
Special Report:
Off the Radar Cash GeneratorsSpecial Report:
The Covered Call Income MachineCabot Turnaround Letter
Special Bulletin October 16: We are raising our price target on shares of Jeld-Wen (JELD) to 28 from 25.
Weekly Update October 16: This week is the start of earnings season. We review Wells Fargo’s (WFC) earnings and provide updates on several Cabot Turnaround Letter recommended stocks. Also, note that we are raising our price target on Jeld-Wen (JELD) to 28 from 25. To listen today’s podcast click here.
Monthly Issue September 2020: Energy Service Companies: With a small cadre of mega-cap technology stocks driving the stock markets to record levels, we are, as contrarian investors, looking for industries that are extremely out of favor yet remain fully relevant in the economy. One such industry is energy service. These companies provide all the services, drilling rigs and related equipment and supplies that oil and gas producers need to find, drill for and produce their hydrocarbons. In essence, they provide the picks and shovels. Producers long-ago outsourced these functions to the specialists.
Wall Street’s Best Investments
Daily Alert October 16: Afterpay Limited (APT.AX) Cabot Global Stocks Explorer
Monthly Issue October 15: Market volatility has eased a bit this past month, with the Dow Jones Industrial Average gaining almost 1,000 points. The service industry, according to ISM, improved, and the unemployment rate dropped to 7.9% for September. As you’ll see in our Advisor Sentiment Barometer and Market Views, sentiment remains about the same. It seems investors are awaiting the election results before they make any big moves. Nonetheless, our contributors have been very busy selecting ideas that look interesting—no matter how the election turns out. Nancy begins this issue with our Spotlight Stock, Celanese Corporation (CE), a specialty chemical company that is growing its global market share. In Nancy’s Feature article, she explores the catalysts that are driving industry growth, as well as the unique properties that should keep our Spotlight Stock in an industry-leading position.
Daily Alert October 15: Liberty All-Star Growth Fund, Inc. (ASG) Contrarian Outlook
Daily Alert October 14: Vipshop Holdings Limited (VIPS) Cabot Global Stocks Explorer
Daily Alert October 13: NextEra Energy, Inc. (NEE) Safe Money Report
Daily Alert October 12: J. M. Smucker Company (SJM) The Prudent Speculator
Ask the Experts
Cabot Profit Booster
Question: What happens to the dividend if you buy options on stocks with dividends? Is it better not to do that?
Jacob: Great question. In essence it doesn’t matter. Why? The options market prices in the dividend payments into options, so there is no net benefit or penalty for buying calls/puts on stocks that pay dividends.
Quarterly Cabot Analyst Meeting
The recording of the Cabot Prime Members Meeting with the Analysts from July 15, 2020 is now available for you to listen to at your convenience—click here for access. This private call with our analysts is one of your exclusive Cabot Prime member benefits.
Stock Recommendations Tracker
The table below lists all of the stocks held in any Cabot portfolio.
Updated or revised recommendations from the past week are in purple text.
Stocks added to a portfolio are highlighted in green text.
Closed stock positions in the past week are highlighted in red text.
| Stock | Cabot Global Stocks Explorer | Cabot Growth Investor | Cabot Marijuana Investor | Cabot Stock of the Week | Cabot Undervalued Stock Advisor | Cabot Dividend Investor |
|---|---|---|---|---|---|---|
| ABBV | Buy | |||||
| AEM | Buy | |||||
| APT.AX | Buy 1/2 | |||||
| ARE | Hold | |||||
| AVGO | Hold | |||||
| AZEK | Buy | |||||
| BABA | Hold | |||||
| BE | Buy | |||||
| BGS | Buy | Buy | ||||
| BIP | Buy 2/3 | |||||
| BMY | Buy | |||||
| BSCL | Buy 1/2 | |||||
| CCI | Hold 1/2 | |||||
| CGC | See Advisory | |||||
| COLM | Hold | Buy | ||||
| CRLBF | See Advisory | |||||
| CURLF | See Advisory | |||||
| DDOG | Buy | |||||
| DLR | Buy | Buy | ||||
| DOW | Hold | |||||
| DXCM | Hold | |||||
| EPD | Hold | |||||
| EQH | Strong Buy | |||||
| FIVE | Buy | |||||
| GM | Strong Buy | |||||
| GRWG | See Advisory | |||||
| GTBIF | See Advisory | |||||
| GTLS | Sell | |||||
| HTHT | Hold | |||||
| IIPR | See Advisory | Hold 2/3 | ||||
| JUSHF | See Advisory | Hold 2/3 | ||||
| KL | Buy 1/2 | |||||
| LGIQ | Buy 1/2 | |||||
| LLY | Buy | Buy | ||||
| MKSI | Hold | |||||
| MO | Buy | |||||
| MPC | Hold | |||||
| NEE | Hold | Hold 1/2 | ||||
| NET | Hold 1/2 | |||||
| NKLA | Hold | |||||
| NVCR | Buy | |||||
| PGX | Hold 1/2 | |||||
| PENN | Buy 1/2 | |||||
| PINS | Buy | Buy | ||||
| PWR | Buy | Buy | ||||
| QCOM | Buy | Hold 2/3 | ||||
| REMX | Buy 1/2 | |||||
| ROKU | Buy 1/2 | |||||
| SE | Hold 1/2 | Hold | ||||
| SGEN | Buy | |||||
| SPCE | Buy | Buy | ||||
| SSO | Buy | |||||
| STAG | Hold 1/2 | |||||
| TAP | Buy | Strong Buy | ||||
| TCNNF | See Advisory | Buy | ||||
| TMX | Buy | |||||
| TOT | Hold | |||||
| TPB | See Advisory | |||||
| TRSSF | See Advisory | |||||
| TSLA | Hold | |||||
| TSM | Buy 1/2 | Buy | ||||
| TSN | Buy | |||||
| TWLO | Buy | |||||
| UEIC | Buy | |||||
| V | Buy | |||||
| VIAC | Buy | |||||
| VIPS | Buy 1/2 | |||||
| VLO | Hold 1/2 | |||||
| VOYA | Buy | |||||
| VZ | Buy | |||||
| WING | Hold | |||||
| XEL | Hold 2/3 | |||||
| ZM | Hold |